Optimizing Healthcare Inventory Management With AI and RFID
The headlines about shortages and disruptions in healthcare supply chains aren’t going away anytime soon. The industry needs help — and it’s here, through a combination of artificial intelligence and radio frequency identification.
Recent evolutions in AI and machine learning have opened up new areas for real-time analytics, better scenario planning, and improved predictive modeling. At the same time, organizations are embracing RFID, which enables accurate inventory scanning with less time and labor while collecting essential data. Combining the two technologies can give healthcare supply chains a massive advantage over their competitors.
Healthcare institutions are dinosaurs. Suppliers, distributors and manufacturers still rely on outdated technologies to serve healthcare facilities, through spreadsheets and manual inventory counts. Meanwhile, their counterparts in other industries are rushing to adopt new ways of solving problems, leaving those in the healthcare arena to suffer from labor shortages, inflation and lost revenue.
AI relies on good, clean data to make accurate predictions. RFID enables users to get a precise inventory count in less time with fewer people. Both technologies are going through a democratization process, providing organizations that are willing to step out of their comfort zone with an opportunity to mitigate the impact of business challenges.
Imagine that you’re a distributor in the healthcare business, selling 100,000 products and distributing them to 6,000 hospitals. Following are some hurdles that AI and RFID can help you to surmount.
The technologies can reduce manual tasks, automate low-risk actions and deliver more insightful dashboards.
A distributor can intake inventory using RFID, with a minimal number of warehouse workers. The collected data goes into an enterprise resource planning (ERP) or warehouse management system (WMS) application, which an AI engine can then analyze. In minutes, one can see how much each item will likely sell in the next day, week or month, down to the SKU level, using seasonal and time series forecasting modalities. The distributor can automate accurate reordering protocols for hospitals with little human help, significantly reducing man-hours for processing inventory and analyzing vast swaths of data.
Together, AI and RFID allows healthcare organizations to understand usage patterns, optimize inventory management and improve demand prediction.
Knowing customers better than they know themselves can be critical in helping businesses battle the negative forces of inflation in a data-driven world. With the help of AI, and using clustering machine learning algorithms, a distributor can see which products that hospitals in a particular region will likely purchase, predict the potential profitability of each hospital, and determine optimal pricing to ensure the best mix of sales and profit.
AI and RFID allow users to access deeper customer insights, offer customers proactive support and analyze customer sentiment.
AI can help the distributor predict what each hospital is likely to purchase and take appropriate action, employing a similar strategy that Amazon uses for products, and Netflix for movie recommendations. Targeting the right hospital with the right product at the right time improves sales, increases average order value and reduces churn.
AI and RFID go beyond “buzzword” technologies. When implemented correctly, they can significantly impact a healthcare organization’s top- and bottom-line growth in ways that wouldn’t have been imaginable even a decade ago.
These exciting tools are revolutionizing how organizations take advantage of the supply chain data they already have, to make more informed strategic decisions. Everything that Amazon, Walmart, and Nestle are doing today could apply to your healthcare organization equally. The important thing is to get started, and take the “crawl, walk, run” approach. You don’t want to let others decide your future.